Quora Answer: Should Religious Assets be Taxed?

The following is my answer to a Quora question: “Do you believe religious assets should be taxed, or remain tax-exempt like they are now?”

That depends on how they are registered and run.  Within the context of Singapore, religious entities, such as places of worship, charities and homes, are registered as non-profit entities.  They may also apply for Institute of Public Character status.  This does not mean that there is no tax.  There is reduced tax, but there is stringent oversight.  For example, charitable contributions have to be spent within the financial year, or they will be taxed at corporate rates.  This means such organisations cannot unfairly hoard wealth taken from the public.  The salaries of the staff are still subject to income tax.  On the other hand, donations to IPCs have a tax exemption, which encourages bequeathments.

I think this is a fair tax regime.  We cannot allow charities to be unconditionally tax exempt such as happens in the US, because they become vehicles for the wealthy to engage in tax evasion.  On the other hand, societies require such vehicles to take care of the underprivileged or specific sections of the populace, because the government cannot be expected to do as good a job when they are the enactors of policy.  There is a Commissioner of Charities to investigate abuse and audits such entities to ensure compliance.